Lakeland Financial Earnings 2019-09-30

LKFN 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
STBA	1,255	7,335	6,370	0	0	107	194	1,248		6.4	1%
SRCE	1,228	6,650	5,845	0	0	87	166	1,131		6.8	1%
OFG	1,223	6,464	5,419	0	0	95	185	545		2.9	1%
FBK	1,212	5,940	5,222	0	0	77	161	1,048		6.5	1%
CHCO	1,212	4,940	4,304	46	0	76	129	1,043	0%	8.1	2%
LKFN	1,164	4,976	4,410	0	0	85	164	968	0%	5.9	2%
TCBK	1,140	6,395	5,519	39	0	85	131	964	0%	7.4	1%
EFSC	1,101	7,182	6,356	0	0	81	161	912		5.7	1%
NBHC	1,092	5,858	5,124	0	0	75	120	990		8.2	1%
FBNC	1,076	6,012	5,197	0	0	92	158	737		4.7	2%

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 0-11487

LAKELAND FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Indiana		35-1559596
(State or Other Jurisdiction		(IRS Employer
of Incorporation or Organization)		Identification No.)

202 East Center Street, Warsaw, Indiana		46580
(Address of principal executive offices)		(Zip Code)

(574) 267‑6144

(Registrant’s Telephone Number, Including Area Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, No par value	LKFN	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ ‘‘smaller reporting company,’’ and ‘‘emerging growth company’’ in Rule 12b–2 of the Exchange Act.

Large accelerated filer ⌧ Accelerated filer ◻ Non-accelerated filer◻

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding at October 31, 2019: 25,623,016

Table of Contents

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Consolidated Balance Sheets — September 30, 2019 and December 31, 2018	1
	Consolidated Statements of Income — three months and nine months ended September 30, 2019 and 2018	2
	Consolidated Statements of Comprehensive Income — three months and nine months ended September 30, 2019 and 2018	3
	Consolidated Statements of Changes in Stockholders’ Equity — three months and nine months ended September 30, 2019 and 2018	4
	Consolidated Statements of Cash Flows — nine months ended September 30, 2019 and 2018	5
	Notes to the Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	51

PART II. OTHER INFORMATION		52

Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53

SIGNATURES		54

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS (in thousands, except share data)


	September 30,		December 31,
	2019		2018
	(Unaudited)
ASSETS
Cash and due from banks	$	90,442	$	192,290
Short-term investments		46,133		24,632
Total cash and cash equivalents		136,575		216,922

Securities available-for-sale (carried at fair value)		613,230		585,549
Real estate mortgage loans held-for-sale		7,424		2,293

Loans, net of allowance for loan losses of $50,628 and $48,453		3,972,593		3,866,292

Land, premises and equipment, net		59,631		58,097
Bank owned life insurance		83,153		77,106
Federal Reserve and Federal Home Loan Bank stock		13,772		13,772
Accrued interest receivable		15,823		15,518
Goodwill		4,970		4,970
Other assets		40,984		34,735
Total assets	$	4,948,155	$	4,875,254

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Noninterest bearing deposits	$	1,011,336	$	946,838
Interest bearing deposits		3,272,054		3,097,227
Total deposits		4,283,390		4,044,065

Borrowings
Securities sold under agreements to repurchase		0		75,555
Federal Home Loan Bank advances		0		170,000
Subordinated debentures		30,928		30,928
Total borrowings		30,928		276,483

Accrued interest payable		12,071		10,404
Other liabilities		37,330		22,598
Total liabilities		4,363,719		4,353,550

STOCKHOLDERS’ EQUITY
Common stock: 90,000,000 shares authorized, no par value 25,623,016 shares issued and 25,445,400 outstanding as of September 30, 2019 25,301,732 shares issued and 25,128,773 outstanding as of December 31, 2018		114,243		112,383
Retained earnings		460,736		419,179
Accumulated other comprehensive income (loss)		13,467		(6,191)
Treasury stock at cost (177,616 shares as of September 30, 2019, 172,959 shares as of December 31, 2018)		(4,099)		(3,756)
Total stockholders’ equity		584,347		521,615
Noncontrolling interest		89		89
Total equity		584,436		521,704
Total liabilities and equity	$	4,948,155	$	4,875,254

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
NET INTEREST INCOME
Interest and fees on loans
Taxable	$	50,139	$	46,127	$	149,094	$	132,360
Tax exempt		234		208		720		627
Interest and dividends on securities
Taxable		2,209		2,275		6,956		7,201
Tax exempt		1,819		1,570		5,171		4,367
Other interest income		368		199		957		687
Total interest income		54,769		50,379		162,898		145,242

Interest on deposits		14,692		11,473		44,131		31,488
Interest on borrowings
Short-term		113		555		1,295		861
Long-term		419		426		1,307		1,212
Total interest expense		15,224		12,454		46,733		33,561

NET INTEREST INCOME		39,545		37,925		116,165		111,681

Provision for loan losses		1,000		1,100		2,985		6,100

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		38,545		36,825		113,180		105,581

NONINTEREST INCOME
Wealth advisory fees		1,736		1,627		5,002		4,676
Investment brokerage fees		386		376		1,300		1,043
Service charges on deposit accounts		3,654		4,114		12,791		11,542
Loan and service fees		2,518		2,327		7,403		6,925
Merchant card fee income		690		643		1,982		1,834
Bank owned life insurance income		515		466		1,246		1,177
Mortgage banking income		636		319		1,256		998
Net securities gains (losses)		6		0		94		(6)
Other income		624		752		2,804		2,036
Total noninterest income		10,765		10,624		33,878		30,225

NONINTEREST EXPENSE
Salaries and employee benefits		12,837		12,755		37,231		36,267
Net occupancy expense		1,351		1,229		4,000		3,892
Equipment costs		1,385		1,316		4,143		3,840
Data processing fees and supplies		2,620		2,489		7,619		7,292
Corporate and business development		999		891		3,376		3,070
FDIC insurance and other regulatory fees		(249)		412		566		1,282
Professional fees		1,479		934		3,487		2,716
Other expense		2,315		2,174		6,880		5,346
Total noninterest expense		22,737		22,200		67,302		63,705

INCOME BEFORE INCOME TAX EXPENSE		26,573		25,249		79,756		72,101
Income tax expense		5,119		4,679		14,907		13,053
NET INCOME	$	21,454	$	20,570	$	64,849	$	59,048

BASIC WEIGHTED AVERAGE COMMON SHARES		25,622,338		25,301,033		25,576,740		25,284,085
BASIC EARNINGS PER COMMON SHARE	$	0.84	$	0.81	$	2.54	$	2.33
DILUTED WEIGHTED AVERAGE COMMON SHARES		25,796,696		25,745,151		25,745,029		25,719,693
DILUTED EARNINGS PER COMMON SHARE	$	0.83	$	0.80	$	2.52	$	2.30

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited - in thousands)


	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Net income	$	21,454	$	20,570	$	64,849	$	59,048
Other comprehensive income (loss)
Change in securities available for sale:
Unrealized holding gain (loss) on securities available-for-sale arising during the period		4,979		(4,576)		24,832		(15,978)
Reclassification adjustment for (gains) losses included in net income		(6)		0		(94)		6
Net securities gain (loss) activity during the period		4,973		(4,576)		24,738		(15,972)
Tax effect

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	26	$1,164

10-Q	2019-11-01	Quarter: 2019-09-30
10-Q	2019-08-09	Quarter: 2019-06-30
10-Q	2019-05-03	Quarter: 2019-03-31
10-K	2019-02-28	Annual: 2018-12-31
10-Q	2018-11-05	Quarter: 2018-09-30
10-Q	2018-08-03	Quarter: 2018-06-30
10-Q	2018-05-07	Quarter: 2018-03-31
10-K	2018-03-01	Annual: 2017-12-31
10-Q	2017-11-07	Quarter: 2017-09-30
10-Q	2017-08-07	Quarter: 2017-06-30
10-Q	2017-05-10	Quarter: 2017-03-31
10-K	2017-03-01	Annual: 2016-12-31
10-Q	2016-11-09	Quarter: 2016-09-30
10-Q	2016-08-09	Quarter: 2016-06-30
10-Q	2016-05-10	Quarter: 2016-03-31
10-K	2016-03-03	Annual: 2015-12-31
10-Q	2015-11-09	Quarter: 2015-09-30
10-Q	2015-08-10	Quarter: 2015-06-30
10-Q	2015-05-11	Quarter: 2015-03-31
10-K	2015-03-05	Annual: 2014-12-31
10-Q	2014-11-10	Quarter: 2014-09-30
10-Q	2014-08-11	Quarter: 2014-06-30
10-Q	2014-05-12	Quarter: 2014-03-31
10-K	2014-03-03	Annual: 2013-12-31
10-Q	2013-11-12	Quarter: 2013-09-30
10-Q	2013-08-09	Quarter: 2013-06-30
10-Q	2013-05-10	Quarter: 2013-03-31
10-K	2013-03-04	Annual: 2012-12-31
10-Q	2012-11-07	Quarter: 2012-09-30
10-Q	2012-08-08	Quarter: 2012-06-30
10-Q	2012-05-10	Quarter: 2012-03-31
10-K	2012-03-05	Annual: 2011-12-31
10-Q	2011-11-09	Quarter: 2011-09-30
10-Q	2011-08-09	Quarter: 2011-06-30
10-Q	2011-05-09	Quarter: 2011-03-31
10-K	2011-03-07	Annual: 2010-12-31
10-Q	2010-11-04	Quarter: 2010-09-30
10-Q	2010-08-04	Quarter: 2010-06-30
10-Q	2010-05-05	Quarter: 2010-03-31
10-K	2010-03-08	Annual: 2009-12-31

8-K	2020-01-14	Regulation FD
8-K	2019-11-14	Other Events
8-K	2019-11-04	Officers, Exhibits
8-K	2019-10-25	Earnings, Exhibits
8-K	2019-10-08	Regulation FD
8-K	2019-07-25	Earnings, Exhibits
8-K	2019-07-09	Regulation FD
8-K	2019-04-25	Earnings, Exhibits
8-K	2019-04-09	Regulation FD, Exhibits
8-K	2019-04-09	Shareholder Vote
8-K	2019-03-20	Amend Bylaw, Exhibits
8-K	2019-03-14	Officers, Regulation FD, Exhibits
8-K	2019-01-25	Earnings, Other Events, Exhibits
8-K	2019-01-08	Regulation FD
8-K	2018-11-27	Officers
8-K	2018-10-25	Earnings, Exhibits
8-K	2018-10-11	Officers, Regulation FD, Exhibits
8-K	2018-10-09	Regulation FD
8-K	2018-07-25	Earnings, Exhibits
8-K	2018-07-10	Regulation FD
8-K	2018-04-25	Earnings, Exhibits
8-K	2018-04-10	Regulation FD, Exhibits
8-K	2018-04-10	Regulation FD, Exhibits
8-K	2018-01-25	Earnings, Exhibits
8-K	2018-01-11	Regulation FD
8-K	2018-01-09	Regulation FD

EX-31.1	ex-31d1.htm
EX-31.2	ex-31d2.htm
EX-32.1	ex-32d1.htm
EX-32.2	ex-32d2.htm